HOW A LOCAL MANUFACTURER MAKES N67.5M FROM TOMATO IN ONE YEAR

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Today, I am going to spill the beans on another simple business that makes hundreds of millions of Naira yearly. This business is tomato paste production. To the untrained eye, this business looks complex, but the truth is that with a few machinery and adequate training, anyone can embark on this lucrative business.

Like we always do in Millionaires Academy, we take real case studies from actual business men and women, and today’s case study, revealed how he made a gross income of N 67,500,000 from tomato paste production in one year. For confidentiality sake, this is a brief summary. Detailed analysis is available to students of the Millionaires Academy.

Let’s begin:

     Name of sector profiled:  Food, Beverages and Tobacco

Major products/by-product:   Tomato Paste (PUREE)

Industry size:  Small Scale

 

Background Market Study:

 

Presently, the tomato value chain in the country operates very inefficiently; the growers face lots of wastage at the farm before harvesting due to over-ripening and activities of rodents, insects, diseases etc. While farmers usually sell their excess more often than not some are unsold and will waste because of their short shelf life once ripe. Although they can be grown all year round, the general practice with farmers is to grow them twice a year, and usually not on full-time basis because of the risks involved.

Storage and preservation are major problems. One of the common ways of preservation is cutting to pieces and drying. This of course, takes the freshness out of the tomatoes. To avoid wastage, the present trend is to can the tomatoes either as fruits, paste or in the form of juice. This way, they are preserved much longer and can be used at convenience. (Note: For export purposes, Tomato Juice is rapidly overtaking Tomato paste in the global market. I will share on Tomato Juice production in a subsequent post).

 

All households use tomatoes in one form or the other at least once weekly in the rural areas, while in the urban areas, they are used almost daily. Therefore, the demand is very high. To match this demand, preservation techniques should be employed, and farmers will be encouraged to grow more throughout the year and on a full-time basis.

 

Project Engineering:

  • Plant capacity: This case study is that of a local plant producing 2000 MT/annum of tomato paste.
  • Raw materials requirement:

The main raw materials for the production of the tomato puree include fresh tomatoes, assorted pepper, salt, thickeners (such as corn flour starch,) and preservatives (e.g. Sodium bicarbonate).

 

SUMMARY OF PRODUCTION PROCESS:

The tomatoes and pepper are soaked and washed in a stainless – steel tank and then trimmed and chopped. They are then steamed in water containing the right amount of sodium bicarbonate. Finally, the mixture is milled to a fine slurry, salted and excess water removed until the right concentration is obtained. The puree is canned and labeled.

(Detailed production process available to all Millionaires Academy Students. Register @ www.register.millionaire.ng)

 

Machinery and Equipment Requirements:

Unloader

Folk liter

Washing tank

Sorting table

Chopper

Pulper preheater

Refiner

Collection tank

Paste collection tank Paste sterilizer.

Filler

Scanner

Continuous cooler

Boiler

Generator.

 

Some of the equipment were imported while the rest were sourced locally to reduce investment cost.

 

 

Labour/Manpower Requirement: The number of persons involved in the project is 20.

Manager: 1

Skilled: 3

Unskilled: 16

 

The manpower is sourced locally; their training need can be met in-plant or within the country.

 

 

* Utilities

Water, electricity, telephone, transportation are necessary for maximum productivity and efficiency

 

 Preliminary Financial Analysis: (Available only for Millionaires Academy Students @ www.register.millionaire.ng )

 

Costs of Fixed assets

 

Working Capital

Raw material

Salaries

Utilities

 

Turnover: 2000 MT at N50,000 per ton N100 million

 

Less Operating Costs

 

Gross Margin N67.5 million

 

If more Nigerians can forget get-rich-quick schemes and take the time to build small industries like this tomato paste plant, before long Nigeria will reclaim its glory in Africa and indeed the entire world. We do not even need to export tomato paste, because we have a huge local market and the few local producers, are not meeting the local demand.

 

Another problem is that Nigerian Entrepreneurs shy away from professional business training, opting to do business the same way their father taught them. This has given rise to lots of mom and pop shops, but few global brands. As an entrepreneur, the wisest decision you can make, is to invest in yourself, your staffs and your business.

 

Millionaires Academy, is the most affordable online business school in Nigeria today, that delivers world class certified business training.

 

Admission is on. Register with us today @ www.register.millionaire.ng

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